Olentangy Local School District Treasurer Emily Hatfield gave an update on the district’s five-year forecast for the years 2019-23 at last week’s Olentangy Board of Education meeting. Hatfield’s presentation provided a current picture of where the district sits compared to its forecast that was approved in May and submitted to the state.
Under the May forecast, the district’s unencumbered cash balance, which was projected at $83 million for 2018, would drop to $61 million in 2020, a 91-day operational cash balance. By 2022, the final year of the forecast, that balance would drop to just over $11 million, which would sustain the district for only 15 days without additional revenue.
“We don’t have a formal cash balance policy, but our informal policy is to really take a hard look at when we start to have two to three months cash balance … that really takes effect in 2021,” Hatfield told the BOE at the April meeting. “And looking at the numbers as they are right now, we would be looking at fiscal year ‘20 in terms of maybe looking at a potential ballot year, so we could collect and have the funds available in 2021.”
According to Hatfield’s October update, unreserved balance projections show a $75 million balance for the 2019 fiscal year, a balance the district could use to operate for 117 days. The balance drops to $60 and $34 million in 2020 and 2021, respectively, before showing a negative balance of $1 million and $47 million in 2022 and 2o23, respectively.
Changes in expenditure projections from May include staff additions, reduced cost estimates as a result of negotiated changes in staff cost-sharing structure of medical insurance, and lower premium rates for the new insurance package.
Variances in the revenue summary reflect an increase in inflation for commercial new construction and higher than expected interest incomes, among other factors.
The updated forecast continues to show a higher total of expenditures than revenue for each of the next five years, with that gap increasing each year.
Hatfield pointed to the district being locally funded and reliant on levies as part of the reasoning, while also pointing out the lack of state funding the district receives. At the April meeting, Hatfield said state funding makes up only 6 percent of the district’s revenue
Enrollment projections continue to show a steady increase, with the district expecting to surpass the 22,000 student mark by 2022. Hatfield said the enrollment projections will be updated in November, which will have a significant impact on the forecast.
“(Enrollment) is a key driver in our facilities needs, and it’s a key driver in our staffing and how our personnel and benefits expenditures increase. Also, it impacts our operating dollars when you think of how our facilities needs change and what it costs to actually open a new building and operate it, not only filling it with staff, but utilities and all those other expenditures that come along with those (buildings).”
